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Airlines Expected to Cut Upper Tariff Limit by 15%: Minister

Jakarta: At an afternoon tea event with journalists in Jakarta on Wednesday, Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said airline companies are expected to cut their upper tariff limit by 15 percent. All parties, including airline companies, have agreed to the plan, he said.

"It will decline by 15 percent. Garuda has said ok. In fact, Rini (state enterprises minister) has also said it," he said.

The decline in the upper tariff limit should not disrupt the performance of airline companies, he said, adding that it will be evaluated.

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Referring to public complaints about the high prices of air tickets, he asked them to remain calm and await a new decision on the upper tariff limit.

He said the government has made every effort to reduce the prices of air tickets by opening opportunities for the private sector to engage in the aviation turbine fuel (avtur) business, among other measures.

As such, state oil and gas firm Pertamina will compete with the private sector to provide avtur fuel and thereafter its price will be competitive.

"We are different from Singapore where (the avtur price) is almost 25 percent. We do not want the difference to be too much. Singapore itself imports it," he said.

Last week, Minister of State-Owned Enterprises (SOEs) Rini Soemarno said that the prices of Garuda airline tickets are still normal.

The calculation of ticket prices, according to Rini, has taken into account the structure and operating system of the company, so that the upper limit is still considered not to violate the rules.

Previously, PT Garuda Indonesia's Vice President Corporate Secretary Ikhsan Rosan said that Garuda's ticket prices are the current prices. He made the remark when asked about the ticket prices for Eid (Muslim post-fasting festivities) 2019.

To cover the prices that are still considered expensive, Ikhsan said it was taken to improve services. (Antara)